Tasnee sells subsidiary for SAR 700M

Tasnee says agreement includes customary representations, warranties by both parties

National Industrialization Co. (Tasnee) signed on March 1 an agreement to sell its entire stake in Al-Rowad Industrial Transformation Co.to Tahweel Holding for SAR 700 million, subject to customary adjustments under the agreement.

The disclosed transaction value is based on Tahweel Holding’s net asset value (cash-free, debt free). The enterprise value is not directly comparable to the book value, which is an accounting measure. The final cash proceeds will reflect any customary closing adjustments set out in the agreement, Tasnee said in a statement to Tadawul.

The asset’s book value stands at SAR 714 million, the statement added, noting that the transaction will be settled in cash. The buyer completed all necessary financing arrangements for the transaction.

The agreement includes customary representations and warranties provided by both the seller and the buyer.

Completion of the deal is subject to the satisfaction of several conditions, including — but not limited to — obtaining necessary regulatory approvals, such as a no-objection clearance from the General Authority for Competition (GAC), along with other customary closing conditions for such agreements.

Tasnee further stated that Al-Rowad Industrial is one of the leading groups in the plastic conversion industry, comprising several specialized companies that provide innovative solutions for the packaging, agriculture, infrastructure, and industrial sectors. The group includes:

1. Al-Rowad Global Packaging Company Ltd.

Specializes in producing biaxially oriented polypropylene (BOPP) films, metallized films, and other high-value-added films used in flexible packaging solutions, ensuring high quality and reliable performance.

2. Taldeen Plastic Solutions

Produces agricultural films made from low-density polyethylene for greenhouses and other uses, in addition to manufacturing high-density polyethylene pipes and fittings (solid wall, corrugated, and spiral), as well as industrial-grade plastic pallets and crates designed for heavy-duty applications.

3. Al-Rowad National Plastic Company Ltd.

Manufactures extruded plastic sheets such as polycarbonate and polymethyl methacrylate, in addition to injection-molded plastic pails and battery cases. The company also operates advanced plastic recycling lines.

4. Al-Rowad International Industrial Films Company Ltd.

One of the leading producers of geomembrane liners made from high-density polyethylene (HDPE) and linear low-density polyethylene (LLDPE), manufactured to meet global standards for use in infrastructure, environmental, and specialized engineering applications.

5. Al-Rowad United Marketing

Operates an extensive network of retail outlets across the Kingdom, providing products from the Al-Rowad companies directly to consumers, contractors, and farmers, ensuring accessibility and high-quality service.

Meanwhile, Tasnee noted that the target company delivered strong operational and financial performance, driven by ongoing initiatives to enhance operational efficiencies and maximize asset utilization. Tasnee believes that Al-Rowad Industrial is positioned for future expansion, which will require additional capital allocation and focused operational management.

This transaction enables Tasnee to redirect capital in line with its strategic priorities, including strengthening Tasnee’s financial position, accelerating debt reduction, and improving return on capital employed and contributing to sustainable shareholders’ value

creation by aligning assets with the company’s long-term strategic focus on the petrochemicals sector.

This represents a strategic capital allocation decision aimed at maximizing long-term shareholder value through enhanced financial flexibility and redeployment of investment into higher return areas.

The transaction also contributes to simplifying Tasnee's organizational structure and improving cost efficiency. Tasnee believes that this step aligns with its objective of supporting long term shareholder value creation.

Tasnee will continue to review its business portfolio, particularly activities that are not part of its core business, to ensure alignment with its strategic goals and financial priorities — without any commitment to undertake specific future actions.

Furthermore, the transaction is expected to support Tasnee’s strategic focus on the petrochemicals sector and strengthen its financial position by redirecting capital allocation and reducing leverage. It will also contribute to simplifying the company’s organizational structure and enhancing overall operational efficiencies.

Proceeds from the deal will be used to strengthen Tasnee’s financial position by redirecting capital allocation and reducing leverage.

Tasnee appointed Trussbridge as its financial advisor and Kings & Spalding as its legal advisor.

Tahweel Holding has appointed Deloitte as its financial advisor and Dentons as its legal advisor.

Any material developments will be announced in due course, the statement added.

The Saudi-listed firm additionally stated that the transaction represents an important step within its strategy to optimize its business portfolio, enhance return on capital employed, and maximize long-term shareholder value.